“Samsung Electronics plans to reduce processor chip production and investment in its plant in Austin, Texas, this year due to sluggish demand from Apple and rising inventory, according to company and industry officials Tuesday,” Kim Yoo-chul reports for The Korea Times. “The officials said Samsung will cut its investment in the plant to 1 trillion won for this year as it has failed to win any major orders.”
“Apple is cutting its reliance on Samsung-manufactured processors, a key part in handsets and computers,” Kim reports. “‘Samsung will invest less than 1 trillion won [US$930 million] in its chip facility in Austin depending on the market situation,’ said an official at one of Samsung’s technology affiliates by telephone, asking not to be identified. ‘The utilization of the Austin line isn’t that high as Apple orders are disappointing. Samsung should have greater flexibility in operating its chip lines in Austin,’ he stressed.”
“‘This year, Apple will start using products from Taiwan’s TSMC (Taiwan Semiconductor Manufacturing), so the Korean company needs to find alternative customers,’ said an industry official. He said that Samsung has invested a total of $13 billion in the Austin plant since 1996, the firm’s biggest foreign investment so far,” Kim reports. “A leading brokerage house said that Samsung’s processor chip business will have another difficult time this year. ‘As Samsung diverts its resource away from the 20-nanometer (nm) level chip technology to accelerate 14nm and 16nm, the chance of it winning a significant portion of Apple’s business in 20nm is slim. Furthermore, the optimistic outlook from TSMC also suggests strong demand from Apple,’ Bernstein Research said in a note to clients.”
Read more in the full article here.
MacDailyNews Take: As we’ve been advocating for years. Hit ’em where it hurts. This is obviously much more efficient and impactful than multiple interminable lawsuits have thus far proven to be.
So, if this report is true: Better late than never, Apple.
And, Austin will be just fine without a bunch of convicted serial patent infringers running around lying, cheating, and stealing.